Global Wafer Foundry Market in the Q2 of 2024: TSMC Ranks First, SMIC Ranks Third, and Huahong Ranks Sixth!

On September 2, according to a report released by TrendForce, the output value of the world’s top ten wafer foundries in the second quarter of 2024 achieved a month-on-month increase of 9.6%, and the overall output value climbed to $31.962 billion, accounting for 96.0% of the industry as a whole, which is the same as the first quarter of this year.

The quarter-on-quarter increase in revenue was mainly due to customers’ successive launch of consumer parts stocking and inventory replenishment strategies. This trend prompted wafer foundries to receive a large number of emergency orders, which in turn led to a significant increase in their capacity utilization compared to the first quarter of 2024. Behind this phenomenon is the result of the dual effects of the consumption boom brought about by China’s 618 shopping season and the return of consumer terminal inventory levels to normal levels. In addition, the continued strong growth in demand for AI servers also provided support for the performance of these top ten wafer foundries from another dimension.

In the ranking of foundry, the top five leading companies remained stable in the second quarter, namely TSMC, Samsung, SMIC, UMC and GlobalFoundries, and the ranking did not change. In the competition range of the sixth to tenth places, there are significant changes. HuaHong Group maintains its solid position in the sixth place; Tower Semiconductor follows closely, ranking seventh; with the surge in emergency orders in the DDI field and the positive performance in the PMIC market, it has successfully promoted the rapid growth of its shipments, thus achieving a leap in ranking and now ranks eighth; PSMC and Nexchip are ranked ninth and tenth respectively.

In detail, due to Apple’s launch of a new round of stocking cycle and the growth of AI server industry’s demand for high-performance computing (HPC), TSMC’s wafer shipments in the second quarter increased by 3.1% compared with the previous quarter. In addition, due to the significant increase in the contribution share of high-end advanced process products, TSMC’s revenue in the quarter achieved a 10.5% month-on-month increase, totaling $20.82 billion, and its market share continued to stabilize at a high level of 62.3%.

Samsung, with its ability to keep up with TSMC’s pace with its process technology and to be the first to achieve mass production on 3nm process technology, continues to hold the second place in revenue. In the second quarter, Samsung’s market revenue share reached 13%, which was not only higher than 12% in the same period last year, but also maintained the same level as the previous quarter. This growth momentum of Samsung’s foundry business is mainly due to the boost in inventory pre-building and replenishment demand in the smartphone market. At present, Samsung remains committed to expanding its customer base in the field of advanced processes, especially for customers in the fields of mobile devices and AI/HPC. This strategic layout is expected to drive Samsung’s full-year revenue growth to exceed the industry’s average growth rate, demonstrating its strong competitiveness and growth potential in the semiconductor foundry field.

SMIC, ranked third, delivered strong quarterly results and provided positive guidance for the upcoming third quarter that exceeded market expectations. This optimistic outlook is due to the continued recovery of demand in mainland China, including CIS, PMIC, IoT, TDDI and LDDIC applications. SMIC’s 12-inch wafer demand is gradually improving, and its comprehensive ASP is expected to usher in an upward trend as the scope of inventory replenishment by fabless customers in mainland China further expands.

In the second quarter, UMC also benefited from emergency orders in some mid-year consumption peak seasons, especially the significant growth in demand for TV-related ICs, coupled with strong demand for low-end MCUs and other products in the consumer electronics field, which drove a slight increase in wafer shipments to 2.6%. This growth also prompted UMC’s quarterly revenue to increase by 1.1% year-on-year to a total of $1.76 billion, and its market share remained at 5.3%, ranking fourth in the industry.

In the current market environment, GlobalFoundries, which ranks fifth, maintains a market share of 5%, down 1 percentage point from the same period last year, but flat compared with the previous quarter. GlobalFoundries’ revenue in the second quarter of 2024 reached $1.632 billion, a decrease from the same period last year, specifically a year-on-year decline of 12%. Despite the many challenges in the market, GlobalFoundries’ automotive business still showed a growth trend in the second quarter, and this positive performance was mainly due to the increase in new design orders. In addition, with the gradual stabilization of smartphone market inventory and the stabilization of communication and IoT market demand, GlobalFoundries’ business environment is also gradually improving.

Entering the third quarter, with the arrival of the traditional stocking peak season, the wafer foundry market is expected to usher in new growth opportunities. Although the uncertainty of the global economic situation may suppress consumer confidence to a certain extent, the launch of new products such as smartphones, PC/NB will still stimulate significant demand for main chips (SoC) and peripheral ICs. At the same time, the demand for high-performance computing related to AI servers is expected to remain strong until the end of the year and is expected to continue throughout 2025. These positive factors will work together to support the continued growth of the foundry market.

TrendForce predicts that given the increase in capacity utilization of advanced and mature processes in the third quarter, as well as the continued steady growth in market demand, the output value of the world’s top ten foundry companies is expected to grow further, and the quarterly growth rate is expected to be the same as in the second quarter. This trend will open up broader development prospects for foundry companies and bring more impressive performance growth.